The growth of China's auto parts market is projected to outpace that of vehicle sales during the next five years, a boon to plastics suppliers serving China's auto sector.

According to a report by the Shanghai Securities, in the first eight months of 2010, domestic auto parts sales topped 1 trillion yuan (US$150 billion), 46 percent higher than a year ago. Industry-wide profit totaled 82 billion yuan (US$12 billion), up 82 percent from the same period of 2009.

Demand for auto plastics compounds rose 19 percent this year, an analyst from KGI Securities said.

Publicly listed Jiangnan Mould & Plastic Technology Co. Ltd., a leading manufacturer of bumpers, recently reported a 37 percent revenue increase in the first three quarters.

Li Yingang, an analyst with Soochow Securities, said the auto parts industry will witness higher growth than automakers in the next five years. Meantime, Chinese auto suppliers will gain global competitiveness.

In fact, China exported US$33 billion of auto parts and components from Jan. to Oct., showing a 44 percent year-over-year boost, based on latest data from the China Association of Automobile Manufacturers.

China is the world's largest auto manufacturer and the largest new vehicle market. Auto sales are likely to beat previous forecast and reach 18 million units this year, CAAM said this week.